Zendex

We express our gratitude to the Zendex team for the collaborative engagement that enabled the execution of this Smart Contract Security Assessment.

Zendex is a privacy-preserving ZK-AMM, combining zero-knowledge asset management, private swaps, liquidity provisioning, and staking-based fee incentives into a unified DEX protocol.

The system users should acknowledge all the risks summed up in the risks section of the report

Documentation quality

• Functional requirements are partially documented.

• The repository includes a README, deployment-related materials, and setup instructions, but the technical specification is incomplete. Detailed descriptions of the ZK circuits, trust model, role permissions, verifier assumptions, asset flow, upgrade process, and failure scenarios are missing or insufficient.

• The documentation does not fully describe privacy guarantees, limitations, or expected off-chain backend responsibilities.

Code quality

• The development environment is configured with Hardhat, TypeScript tests, Solidity coverage tooling, and deployment scripts.

• The codebase is modular and separates AMM, vault, staking, rewards, verifier, and tree-management logic.

• However, several components duplicate known implementations, including Uniswap V2-style AMM logic and custom ERC20 behavior, instead of relying directly on battle-tested libraries. T

Test coverage

Code coverage of the project is 43.27% (branch coverage).

• The project includes tests for core flows such as staking, boost calculation, Merkle tree operations, vault deposits/withdrawals/split/join, AMM liquidity and swaps, and limit order creation.

• Basic positive and some negative cases are covered. However, tests do not thoroughly cover complex multi-user interactions, adversarial execution ordering, backend failure modes, role abuse scenarios, and full integration flows across all protocol components.

Zendex is a privacy-preserving ZK-AMM and DEX protocol with the following contracts:

• BaseManager.sol — Abstract upgradeable contract providing shared functionality for all manager contracts, including proof verification via ZendexVerifierHub, nullifier validation, Merkle root validation, and commitment insertion through TreeOperator.

• BoostManager.sol — Upgradeable contract that calculates fee boost percentages for users based on their staking positions; the boost formula uses linear interpolation between lock amount and duration to yield 5-25% boost in basis points.

• RewardsEngine.sol — Upgradeable contract managing fee collection from the router, tracking per-user cashback and burn balances across multiple tokens, applying staking boosts at claim time, and auto-converting accumulated fees to native ZEN via swap through the router.

• TreeOperator.sol — Non-upgradeable incremental Merkle tree implementation using Poseidon hashing (PoseidonT3 library) for commitment storage; manages historical roots by epoch, nullifier tracking, liquidity position tracking, and order book metadata for limit orders.

• WZEN.sol — Standard ERC-20 wrapped native coin contract enabling deposit of native ZEN and minting of WZEN tokens, with withdrawal functionality to unwrap and receive native ZEN.

• ZendexAmmManager.sol — Upgradeable manager contract for private AMM operations (addLiquidity, removeLiquidity, swap) that verifies inclusion and action proofs, consumes nullifiers, inserts new commitments (liquidity or swap), and executes trades through ZendexRouter.

• ZendexERC20.sol — Custom ERC-20 implementation serving as the base for LP tokens, featuring EIP-2612 permit functionality with domain separator and typed data hashing for gasless approvals.

• ZendexFactory.sol — Upgradeable factory contract for creating and registering ZendexPair liquidity pool contracts using CREATE2 deployment with deterministic addresses derived from sorted token pairs.

• ZendexOrderBookManager.sol — Upgradeable manager contract for privacy-preserving limit orders; handles order creation with ZK proof verification (createOrder), operator-triggered batch execution (executeOrders), cancellation requests (requestCancelOrder), and final cancellation settlement (cancelLimitOrder).

• ZendexPair.sol — Non-upgradeable Uniswap V2-style constant product AMM pair contract implementing mint, burn, and swap functions with 0.18% LP fee; inherits from ZendexERC20 to serve as its own LP token with permit support.

• ZendexRouter.sol — Upgradeable router contract providing high-level functions for liquidity addition/removal and token swaps (exact input and exact output variants), handling fee extraction and distribution to RewardsEngine, and supporting both standard and fee-on-transfer tokens.

• ZendexStaking.sol — Upgradeable staking contract where users lock tokens for 1-24 periods (minimum 1,000 tokens) to earn fee boosts; enforces that existing stakes can only have their duration extended, not decreased.

• ZendexVault.sol — Non-upgradeable custody contract holding all deposited user assets (WZEN, USDT, USDC, DAI); exposes release and approve functions restricted to authorized manager roles for asset transfers during withdrawals and AMM operations.

• ZendexVaultManager.sol — Upgradeable manager contract for core vault operations (deposit, withdraw, split, join) that verifies ZK proofs, manages commitment insertions, consumes nullifiers, and coordinates asset transfers with ZendexVault.

• ZendexVerifierHub.sol — Upgradeable central registry mapping verifier types (deposit, inclusion, withdrawal, split, join, add/remove liquidity, swap, create/cancel order) to their deployed Barretenberg verifier contract addresses; enables verifier upgrades without modifying manager contracts.

• Math — provides basic math utilities used by AMM contracts, including minimum selection and square-root calculation for liquidity and fee logic.

• UQ112x112 — provides fixed-point arithmetic helpers used by pair contracts for cumulative price calculations and reserve-based price encoding.

Privileged roles

The protocol uses several privileged roles across upgradeable and administrative contracts. Accounts holding DEFAULT_ADMIN_ROLE can upgrade UUPS contracts, manage verifier addresses, and assign or revoke roles depending on the contract. These permissions allow privileged actors to modify critical protocol logic and dependencies, including proof verification, routing, rewards, staking, and manager behavior.

BoostManagersol

• DEFAULT_ADMIN_ROLE: Full administrative control over the contract.

• • Can call _authorizeUpgrade to upgrade the contract implementation.

  • Admin role for DEFAULT_ADMIN_ROLE; can grant and revoke it.

RewardsEngine.sol

• DEFAULT_ADMIN_ROLE: Full administrative control over the contract.

• • Can call _authorizeUpgrade to upgrade the contract implementation.

  • Can call withdrawTreasury to withdraw accumulated treasury fees (swapped to native coins) to any recipient.

  • Admin role for DEFAULT_ADMIN_ROLE and ROUTER_ROLE; can grant and revoke them.

• ROUTER_ROLE: Authorized to deposit trading fees.

• • Can call depositFees to deposit treasury, cashback, and burn fees for users.

TreeOperator.sol

• DEFAULT_ADMIN_ROLE: Full administrative control over the contract.

• • Admin role for DEFAULT_ADMIN_ROLE, VAULT_MANAGER_ROLE, AMM_MANAGER_ROLE, and ORDER_BOOK_MANAGER_ROLE; can grant and revoke them.

• VAULT_MANAGER_ROLE: Authorized to manage Merkle tree state for vault operations.

• • Can call insert to add commitments to the Merkle tree.

  • Can call consume to mark nullifiers as used.

• AMM_MANAGER_ROLE: Authorized to manage Merkle tree state and liquidity tracking.

• • Can call insert to add commitments to the Merkle tree.

  • Can call consume to mark nullifiers as used.

  • Can call trackPosition to record liquidity positions with LP amounts.

  • Can call removePosition to delete tracked liquidity positions.

• ORDER_BOOK_MANAGER_ROLE: Authorized to manage Merkle tree state and order lifecycle.

• • Can call insert to add commitments to the Merkle tree.

  • Can call consume to mark nullifiers as used.

  • Can call openOrder to register new limit orders with execute and cancel commitments.

  • Can call updateOrderStatus to change order status (OPEN, CANCEL_REQUESTED, EXECUTED, CANCELED).

  • Can call setCancellationDeadline to set cancellation deadlines for orders.

WZEN.sol

• No privileged roles. All functions are permissionless.

ZendexAmmManager.sol

• DEFAULT_ADMIN_ROLE (inherited from BaseManager): Full administrative control over the contract.

• • Can call _authorizeUpgrade to upgrade the contract implementation.

  • Admin role for DEFAULT_ADMIN_ROLE; can grant and revoke it.

ZendexERC20.sol

• No privileged roles. Standard ERC-20 with permit functionality.

ZendexFactory.sol

• DEFAULT_ADMIN_ROLE: Full administrative control over the contract.

• • Can call _authorizeUpgrade to upgrade the contract implementation.

  • Admin role for DEFAULT_ADMIN_ROLE; can grant and revoke it.

• feeToSetter (address-based access control): Controls fee recipient configuration.

• • Can call setFeeTo to set the address that receives protocol fees from pairs.

  • Can call setFeeToSetter to transfer fee setter privileges to another address.

ZendexOrderBookManager.sol

• DEFAULT_ADMIN_ROLE (inherited from BaseManager): Full administrative control over the contract.

• • Can call _authorizeUpgrade to upgrade the contract implementation.

  • Admin role for DEFAULT_ADMIN_ROLE and ORDER_BOOK_OPERATOR_ROLE; can grant and revoke them.

• ORDER_BOOK_OPERATOR_ROLE: Authorized to execute and finalize order operations.

• • Can call executeOrders to execute multiple matched limit orders by inserting their execute commitments.

  • Can call cancelLimitOrder to finalize order cancellations by inserting cancel commitments.

ZendexPair.sol

• factory (address-based access control, single-use): Initializes pair tokens.

• • Can call initialize to set token0 and token1 addresses (callable only once at deployment).

ZendexRouter.sol

• DEFAULT_ADMIN_ROLE: Full administrative control over the contract.

• • Can call _authorizeUpgrade to upgrade the contract implementation.

  • Admin role for DEFAULT_ADMIN_ROLE; can grant and revoke it.

ZendexStaking.sol

• DEFAULT_ADMIN_ROLE: Full administrative control over the contract.

• • Can call _authorizeUpgrade to upgrade the contract implementation.

  • Admin role for DEFAULT_ADMIN_ROLE; can grant and revoke it.

ZendexVault.sol

• DEFAULT_ADMIN_ROLE: Full administrative control over the contract.

• • Admin role for DEFAULT_ADMIN_ROLE and MANAGER_ROLE; can grant and revoke them.

• MANAGER_ROLE: Authorized to manage vault assets.

• • Can call release to transfer any token held by the vault to any recipient.

  • Can call approve to grant token spending allowances on behalf of the vault.

ZendexVaultManager.sol

• DEFAULT_ADMIN_ROLE (inherited from BaseManager): Full administrative control over the contract.

• • Can call _authorizeUpgrade to upgrade the contract implementation.

  • Admin role for DEFAULT_ADMIN_ROLE; can grant and revoke it.

ZendexVerifierHub.sol

• DEFAULT_ADMIN_ROLE: Full administrative control over the contract.

• • Can call _authorizeUpgrade to upgrade the contract implementation.

  • Can call update to change verifier addresses for any verifier type (DEPOSIT, INCLUSION, WITHDRAWAL, SPLIT, JOIN, ADDLIQUIDITY, REMOVELIQUIDITY, SWAP, CREATEORDER, REQUESTCANCEL_ORDER).

  • Admin role for DEFAULT_ADMIN_ROLE; can grant and revoke it.

The scope of the project includes the following smart contracts from the provided repository:

Assets in Scope